IDAHO — Diesel prices in Idaho have reached an average of $5.94 per gallon, increasing costs for companies that rely on diesel vehicles and raising concerns that some of those expenses could eventually reach consumers.
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A recent fill-up totaling $614.58 offered a stark example of what it can cost to keep a diesel vehicle moving.
Troy Hicks frequently drives a company-owned diesel vehicle for work. Although he does not personally pay the fuel bill, he said higher prices affect his employer’s bottom line.
“I think more of it the way of the business part of it, so that I know that the profits of the company I work for probably aren’t going to be as high,” Hicks said.
WATCH: Record-high diesel prices squeeze Idaho businesses and could raise consumer costs
Higher diesel costs can squeeze companies’ profit margins. Industry leaders say businesses may eventually pass some of those added expenses on to customers.
The pressure is especially heavy on the trucking industry, where profit margins are already narrow.
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“If you’re making money, you’re averaging maybe 5%, 3% profit. It’s that close,” Allen Hodges, president and CEO of the Idaho Trucking Association, said.
Hodges said the industry has spent the past four years in a severe freight recession, with more trucks available than freight needing to be moved. That imbalance drove down shipping rates and forced some companies out of business.
As the industry works to recover, Hodges said tariffs and rising fuel costs have created additional challenges.
“In a trucking company, there’s basically three costs – the three highest costs,” Hodges said. “One of those is the driver’s salary, fuel and insurance. So it’s a big issue when the price of diesel fuel jumps.”
A semitruck may average about 6 miles per gallon, making a 500-mile haul expensive when diesel prices rise.
Hodges said 72% of the goods consumed in Idaho are transported by truck. He warned that if fuel costs remain high, consumers could eventually pay more for groceries, clothing and deliveries.
“Everybody will be paying more for food at the grocery store and for the clothes on their back and the Amazon deliveries, because everything’s hauled by truck,” Hodges said.
